DTE Energy(DTE) - 2023 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presents DTE Energy and DTE Electric's unaudited consolidated financial statements for Q1 2023, detailing operations, financial position, cash flows, and notes DTE Energy Consolidated Financial Statements (Unaudited) DTE Energy's Q1 2023 results show increased net income to $445 million and strong operating cash flow of $924 million DTE Energy Consolidated Statements of Operations (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2023 (In millions, except per share amounts) | 2022 (In millions, except per share amounts) | | Operating Revenues | $3,779 | $4,577 | | Operating Income | $652 | $558 | | Net Income Attributable to DTE Energy Company | $445 | $394 | | Diluted Earnings per Common Share | $2.16 | $2.03 | DTE Energy Consolidated Financial Position (Unaudited) | | March 31, 2023 (In millions) | December 31, 2022 (In millions) | | :--- | :--- | :--- | | Total Current Assets | $3,537 | $4,180 | | Total Assets | $42,518 | $42,683 | | Total Current Liabilities | $4,036 | $5,173 | | Total Liabilities | $31,872 | $32,282 | | Total Equity | $10,646 | $10,401 | | Total Liabilities and Equity | $42,518 | $42,683 | DTE Energy Consolidated Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2023 (In millions) | 2022 (In millions) | | Net cash from operating activities | $924 | $808 | | Net cash used for investing activities | $(981) | $(782) | | Net cash from financing activities | $151 | $95 | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $94 | $121 | DTE Electric Consolidated Financial Statements (Unaudited) DTE Electric's Q1 2023 net income decreased to $100 million, with operating revenues declining to $1.375 billion, and operating cash flow at $477 million DTE Electric Consolidated Statements of Operations (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2023 (In millions) | 2022 (In millions) | | Operating Revenues — Utility operations | $1,375 | $1,486 | | Operating Income | $198 | $283 | | Net Income | $100 | $201 | DTE Electric Consolidated Financial Position (Unaudited) | | March 31, 2023 (In millions) | December 31, 2022 (In millions) | | :--- | :--- | :--- | | Total Current Assets | $1,922 | $1,851 | | Total Assets | $30,755 | $30,236 | | Total Current Liabilities | $1,657 | $1,902 | | Total Liabilities | $21,142 | $20,541 | | Total Shareholder's Equity | $9,613 | $9,695 | | Total Liabilities and Shareholder's Equity | $30,755 | $30,236 | DTE Electric Consolidated Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2023 (In millions) | 2022 (In millions) | | Net cash from operating activities | $477 | $285 | | Net cash used for investing activities | $(810) | $(619) | | Net cash from financing activities | $398 | $375 | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $65 | $41 | Combined Notes to Consolidated Financial Statements (Unaudited) The combined notes detail corporate structure, accounting policies, revenue disaggregation, regulatory matters, financial instruments, debt, and segment performance - DTE Energy's main businesses include DTE Electric (electricity), DTE Gas (natural gas), and non-utility businesses like DTE Vantage (renewable natural gas) and energy trading operations[61] - DTE Electric consolidates DTE Securitization, a Variable Interest Entity (VIE) established to finance regulatory assets through bond sales, with no recourse to DTE Electric's other assets[69] DTE Energy Revenue by Segment (Q1) | Segment | 2023 (In millions) | 2022 (In millions) | | :--- | :--- | :--- | | Electric | $1,379 | $1,490 | | Gas | $707 | $766 | | DTE Vantage | $184 | $179 | | Energy Trading | $1,568 | $2,203 | - DTE Electric filed a rate case in February 2023, requesting a $622 million increase in base rates to support investments, with a decision expected in December 2023[105] - In April 2023, DTE Electric filed for securitization of $496 million in qualified costs related to retired generation plants[106] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2023 financial results, DTE Energy's increased net income, strategic utility investments for long-term growth and clean energy, and planned capital expenditures - DTE Energy's strategy focuses on long-term EPS growth through capital investments in a modern, reliable grid and cleaner energy, aiming for net-zero carbon emissions by 2050 for utility operations[221][222] Planned Capital Investments (2023-2027) | Segment | Investment (in billions) | Focus Areas | | :--- | :--- | :--- | | DTE Electric | $18 | Distribution infrastructure ($9B), base infrastructure ($4B), cleaner generation ($5B) | | DTE Gas | $3.6 | Base infrastructure ($2.0B), gas renewal program ($1.6B) | | DTE Vantage | $1.0 - $1.5 | Renewable energy projects, custom energy solutions, carbon capture | DTE Energy Net Income by Segment (Q1) | Segment | 2023 (In millions) | 2022 (In millions) | | :--- | :--- | :--- | | Electric | $101 | $201 | | Gas | $171 | $196 | | DTE Vantage | $27 | $14 | | Energy Trading | $138 | $(9) | | Corporate and Other | $8 | $(8) | | Total Net Income | $445 | $394 | - DTE Energy expects approximately $3.2 billion in cash from operations in 2023 and plans capital expenditures of about $4.2 billion[264] Quantitative and Qualitative Disclosures About Market Risk This section details DTE Energy's exposure to market risks, including commodity prices, credit, and interest rates, and how these risks are managed through regulatory mechanisms and hedging - The Electric and Gas businesses have limited earnings risk from commodity price changes due to PSCR (Power Supply Cost Recovery) and GCR (Gas Cost Recovery) regulatory mechanisms[294] - As of March 31, 2023, DTE Energy's trading credit exposure was primarily to investment-grade counterparties, with a total net credit exposure of $1.239 billion before collateral[301] - DTE Energy's exposure to interest rate risk comes from its debt portfolio, which included $1.1 billion of floating rate debt as of March 31, 2023, representing 5.9% of total debt[306] Interest Rate Risk Sensitivity Analysis (Change in Fair Value of Long-Term Debt) | Scenario | DTE Energy (Mar 31, 2023) (In millions) | DTE Electric (Mar 31, 2023) (In millions) | | :--- | :--- | :--- | | 10% Increase in Rates | $(709) | $(480) | | 10% Decrease in Rates | $762 | $523 | Controls and Procedures Management evaluated the effectiveness of disclosure controls and procedures for DTE Energy and DTE Electric as of March 31, 2023, concluding they are effective with no material changes - The CEOs and CFOs of both DTE Energy and DTE Electric concluded that their respective disclosure controls and procedures were effective as of March 31, 2023[311][313] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls for either DTE Energy or DTE Electric[312][314] PART II - OTHER INFORMATION Legal Proceedings This section refers to Notes 5 and 12 of the financial statements for detailed information on legal proceedings, including environmental cases - For information on legal proceedings, the report directs readers to Note 5 (Regulatory Matters) and Note 12 (Commitments and Contingencies) of the Consolidated Financial Statements[316] Risk Factors There are no material changes to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K, which provides a comprehensive discussion - There have been no material changes to the risk factors from those disclosed in the combined 2022 Annual Report on Form 10-K[317] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2023, DTE Energy purchased 26,525 shares of its common stock, primarily for withholding to satisfy income tax obligations upon restricted stock vesting DTE Energy Equity Securities Purchases (Q1 2023) | Period | Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2023 | 24,819 | $108.60 | | Feb 2023 | 45 | $118.48 | | Mar 2023 | 1,661 | $119.38 | | Total | 26,525 | | - The shares purchased represent common stock withheld to satisfy income tax obligations upon the vesting of restricted stock and were not part of a publicly announced repurchase plan[318] Exhibits This section lists the exhibits filed with the Form 10-Q, including a Supplemental Indenture, CEO/CFO certifications, and XBRL data files - Exhibits filed include a Supplemental Indenture for DTE Electric, CEO/CFO certifications under SOX Sections 302 and 906, and XBRL interactive data files[320]